Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 4) 1990 No. 4 of 1991 - SECT 18

18. Section 159GZV of the Principal Act is amended:

   (a)  by inserting after paragraph (a) the following paragraph:
"(aa)   subsection (2) does not apply; and";


   (b)  by adding at the end the following subsections:

"(2) If:

   (a)  an amount of foreign debt interest is, apart from this Division,
        allowable as a deduction in calculating under section 95 the net
        income of a trust estate of a year of income; and

   (b)  the trustee of the trust estate makes an election, in accordance with
        subsection (5), that this subsection apply in relation to the trust
        estate in relation to the year of income; the proportion of the
        foreign debt interest calculated under subsection (3) is not so
        allowable as a deduction.

"(3) The proportion is calculated using the formula:
    Average daily foreign        Foreign          No. of

    debt for excess              equity           excess

    foreign debt days            product          foreign

debt days
    --------------------------               x    ---------

    Average daily foreign debt                    Days in

year of
income where:
Average daily foreign debt for excess foreign debt days is the average of the
total foreign debt of the trust estate in respect of each excess foreign debt
day of the trust estate that occurred in the year of income;
Foreign equity product is the foreign equity product of the trust estate of
the year of income;
Average daily foreign debt is the average of the total foreign debt of the
trust estate in respect of each day that occurred in the year of income;
No. of excess foreign debt days is the number of excess foreign debt days of
the trust estate that occurred in the year of income;
Days in year of income is the number of days in the year of income.

"(4) For the purposes of this section, if the total foreign debt of the trust
estate in respect of a particular day in a year of income exceeds the foreign
equity product of the trust estate of the year of income, the day is an excess
foreign debt day of the trust estate.

"(5) An election made by a trustee for the purposes of subsection (2) must be
lodged with the Commissioner on or before the date of lodgment of the return
of income of the trust estate for the later of the following years of income:

   (a)  the year of income to which the election relates;

   (b)  the year of income in which this subsection commenced; or within such
        further period as the Commissioner allows.".